* Weak U.S. jobs report leads investors to seek safety
* Central banks said to be lining up to buy gold
* Other precious metals slip with industrial metals
(Recasts, updates prices, market activity; adds second byline,
dateline, previously LONDON)
By Carole Vaporean and Pratima Desai
NEW YORK/LONDON, Nov 6 (Reuters) - Gold surged to a record
high above $1,100 an ounce on Friday as investors sought safety
after data showed the U.S. unemployment rate unexpectedly
jumped to 10.2 percent in October.
While doubts about an economic recovery boosted gold, other
precious metals with an industrial component fell, their demand
outlook dented.
"Gold rallied early on the unemployment numbers being
higher than expected. It fueled thoughts of additional stimulus
and reinforced the concept that the Fed will not be able to
raise rates any time soon," said Frank McGhee, head precious
metals trader at Integrated Brokerage Services in Chicago.
U.S. employers cut 190,000 jobs in October, greater than
the 175,000 fewer jobs forecast, and the unemployment rate rose
to 10.2 percent, a 26-1/2-year high that was above average
forecasts of a 9.9 percent rate. [] and
[]
Dealers said gold still enjoyed support from prospects of
central banks buying the yellow metal to diversify reserves.
"The market has the bit between their teeth -- all these
investors have piled into gold in a quasi-physical sense and
now they are being supported in that by the actions of Mr
Central Bank," said RBS metals analyst Stephen Briggs.
Gold hit a record high at $1,100.90 per ounce, up more than
25 percent this year.
By 3:45 p.m. EST (2045 GMT), it was bid at $1,096.65 a troy
ounce <XAU=> from $1,089.55 late in New York on Thursday.
The trigger for the surge this week was news that the
International Monetary Fund had sold 200 tonnes of gold to the
Reserve Bank of India for $6.7 billion. []
"People are focusing on pent up demand for gold from
central banks in emerging markets," said Michael Lewis, head of
commodities research at Deutsche Bank.
"The central bank community for the first time in 20 years
is possibly going to be a net buyer of gold having been a net
seller since 1988," he said.
Some think Asian central banks may not hurry to follow
India's lead given current record prices and the availability
of cheaper domestically produced gold. []
"Indian buying was very significant, but those getting
excited about the potential for copy cat moves need to consider
a number of factors," said David Thurtell, analyst at Citi.
"Culturally, India is more favorably disposed to gold than
every other country. Second, it might be politically dangerous
to be accumulating reserves at the all-time price high."
The central bank story has offset some selling by investors
as seen in the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>.
SPDR's holdings fell 0.055 tonnes to 1,108.344 tonnes on
Thursday, marking the first decline since Oct. 30.
Spot silver <XAG=> was bid at $17.35 in late New York
business down from $17.37 late on Thursday. Platinum <XPT=> was
quoted lower at $1,338 than $1,353.50 and palladium <XPD=> fell
to $328.50, even with late Thursday dealings.
(Reporting by Carole Vaporean; Editing by David Gregorio)
